Apple Services Slowdown Is Likely “Cyclical” and Could Rebound This Year

Seekingalpha2023-02-27

Apple generates a significant portion of its overall revenue from its services business, including $78.1B in its 2022 fiscal year, and an all-time quarterly record of $20.8B in the first quarter of ...

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TeslaLegend
2023-02-27
TeslaLegend
Knife
LimBT
2023-02-27
LimBT
Ok
- TeslaLegend:
  Nice
KHAN BRAND
2023-02-27
KHAN BRAND
ok$ASML Holding NV(ASML)$

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While advertising has declined precipitously in recent quarters, there are signs that the App Store is rebounding.Earlier this month, Bank of America analyst Wamsi Mohan said App Store revenue this year grew to $2.7B through February 6, while total iPhone and iPad downloads were down 0.7% year-over-year, citing third-party data from SensorTower.Mohan noted revenue growth in January in China was healthy and increased by 8.7% year-over-year, though Apple (AAPL) has benefited from recent App Store price increases in certain regions due to the strength of the U.S. dollar.Bernstein's Sacconaghi pointed out the App Store has averaged around 4% growth over the past four quarters and should grow in the \"low double digits\" over time, as weakness in gaming is offset by strength in subscriptions.Over the next three to five years, Sacconaghi believes Apple (AAPL) will grow services revenue between 12% and 15%. This is due to continued growth in its active installed base of now over 2B users, benefits from price increases and the introduction of new offerings such as a potential audience network, which could be worth between $5B and $10B in additional revenue.Of course, it's not all sunshine and roses for Apple's (AAPL) services business. There is regulatory risk, given that the App Store is under scrutiny around the world due to the company's commission fees for app purchases, which in many cases are as high as 30%.Additionally, there is concern that Apple's (AAPL) deal with Google (GOOG) (GOOGL) to be its de facto search engine on its devices could be at risk, considering the antitrust case being levied against Google for its search business.Though global economic uncertainty likely to continue for a while longer - due in part to fits and starts with inflation, the war in Ukraine and China's economic reopening - it's clear that concerns about Apple's (AAPL) Services business is cyclical in nature and likely to pave the way for growth later this year and into 2024, Sacconaghi explained.Earlier this week, it was reported Apple (AAPL) had achieved major breakthroughs in a secret project to develop a continuous blood glucose monitoring system.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9957480716,"gmtCreate":1677488680236,"gmtModify":1677488684913,"author":{"id":"3572489627147183","authorId":"3572489627147183","name":"TeslaLegend","avatar":"https://static.tigerbbs.com/180ad6f06095bcbf2b6594d26c494752","vip":1,"hat":"https://static.tigerbbs.com/f84859c65fc2d7681e28f6b8e9b0535a","crmLevel":4,"crmLevelSwitch":1,"authorIdStr":"3572489627147183","idStr":"3572489627147183"},"htmlText":"Knife&nbsp;","listText":"Knife&nbsp;","text":"Knife","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9957480716","repostId":2314889322,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9957414056,"gmtCreate":1677486024376,"gmtModify":1677486027680,"author":{"id":"4134278158747952","authorId":"4134278158747952","name":"LimBT","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"4134278158747952","idStr":"4134278158747952"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9957414056","repostId":2314889322,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105893977,"gmtCreate":1677488694281,"gmtModify":1677488697799,"authorId":3572489627147183,"author":{"id":3572489627147183,"idStr":"3572489627147183","authorId":3572489627147183,"name":"TeslaLegend","avatar":"https://static.tigerbbs.com/180ad6f06095bcbf2b6594d26c494752","vip":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.09.28","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1001},"crmLevel":4,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9957414056,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Nice</span>","text":"<span class=\"s1\">Nice</span>","html":"<span class=\"s1\">Nice</span>"}],"langContent":"EN"},{"id":9957416442,"gmtCreate":1677484144886,"gmtModify":1677484146494,"author":{"id":"4136970966827792","authorId":"4136970966827792","name":"KHAN BRAND","avatar":"https://community-static.tradeup.com/news/2fea8e29369f8def6902130be7f3e72e","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"4136970966827792","idStr":"4136970966827792"},"htmlText":"ok<a href=\"https://ttm.financial/S/ASML\">$ASML Holding NV(ASML)$&nbsp;</a>","listText":"ok<a href=\"https://ttm.financial/S/ASML\">$ASML Holding NV(ASML)$&nbsp;</a>","text":"ok$ASML Holding NV(ASML)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9957416442","repostId":2314889322,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":54,"commentSize":3,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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